Time Warner seeks telecom IPO

Time Warner filed for an initial public offering with federal regulators today in the telecommunications business--another sign that the boundary between the cable and telephone business is blurring.

The so-called one-stop shop for telecommunications services--in phones, cable TV, and Net access--was supposed to be a byproduct of sweeping deregulation signed into law in 1996. But this has been slow in coming. However, the media and entertainment giant's filing is an indication that the idea is catching on. It is aimed at the business market.

"The company believes that the 1996 [Telecom Reform] Act and certain state regulatory initiatives provide increased opportunities in the telecommunications marketplace by opening all local markets to competition and by requiring [telecommucations carriers] to provide increased direct interconnection," according to the filing by Time Warner Telecom Incorporated.

In documents filed with the Securities and Exchange Commission, the company's networks have been "constructed primarily through licensing the use of fiber capacity from TW Cable." At year's end in 1997, the company operated networks in 19 metropolitan markets that spanned nearly 6,000 route miles. Consolidated revenue grew by more than 130 percent for that year, compared with the previous one.

The existing shareholders include Time Warner, US West, and Newhouse's Advanced Publications. Lehman Brothers and Morgan Stanley Dean Witter are listed as lead underwriters in the deal. The filing did not list the size of the offering.

Competition is expected to be stiff, though, not only from the Baby Bells and long-distance carriers such as AT&T but from other cable TV companies such as Tele-Communications Incorporated.